Kalshi has permanently banned former U.S. Representative George Santos from accessing its exchange after finding he likely engaged in insider trading when he bet against his attendance at the State of the Union address. According to Kalshi's latest announcement, the ban became effective August 29, 2026, making it the first lifetime ban in Kalshi's history. The exchange permanently suspended Santos from accessing its platform either directly or indirectly, and imposed a $71,356 penalty - exactly four times the profit amount. A Kalshi spokesperson cited Santos's 'lack of cooperation' with the compliance department as a specific factor in the decision to make the ban permanent. The former congressman retains the right to appeal to the CFTC, as reported by multiple sources. Santos has responded to the ban by calling Kalshi 'an unserious company' and labeling the action 'frivolous nonsense' on social media platform X.
As reported by Kalshi, Santos traded contracts he could control directly, buying and selling both 'Yes' contracts (which would pay if he appeared) and 'No' contracts (which would pay if he didn't). During the trading period from February 2-25, Santos published several statements about his travel and attendance plans, with some posts being false or misleading to move prices before purchasing or selling relevant contracts. The exchange determined these statements had their intended effect on the market, allowing Santos to generate the $17,839 profit by controlling information about his plans while moving between 'Yes' and 'No' positions. On the eve of the speech, Kalshi's market pegged the odds of his attendance at roughly 75%. The incident occurred four months after President Donald Trump granted Santos clemency in a fraud case following his expulsion from the House, and Santos settled a related Commodity Futures Trading Commission case for more than $35,000. Santos addressed the controversy on his podcast in March, stating 'I guess people lost money. Some people made unexpected money. That's to show you how fragile these markets are.'
A separate Commodity Futures Trading Commission order issued on July 31 provided additional details about the trading activity. According to the CFTC, Santos opened his Kalshi account on February 11 and deposited approximately $7,000, using the funds exclusively to trade on his own attendance. From February 12 through February 22, he accumulated 30,874 'Yes' contracts at a total cost of $6,695.94. The CFTC found that Santos closed his 'No' trade early on February 25 for a $14,390.57 profit, combined with his earlier gains producing the total amount addressed by Kalshi's disciplinary action. The CFTC characterized the conduct as manipulative trading of an event contract in violation of the Commodity Exchange Act, making Santos the first person federally sanctioned for political prediction market manipulation. The federal probe prompted rival online prediction platform Polymarket to cut ties with Santos in June.
The Kalshi sanction is separate from the CFTC settlement, which imposed different penalties and restrictions. As reported by crypto.news, the CFTC ordered Santos to disgorge $17,569.98, pay a $17,500 civil penalty, and stop trading on any CFTC-registered entity for three years. The regulator applied Section 6(c)(1) of the Commodity Exchange Act and Regulation 180.1, which prohibit manipulative or deceptive conduct involving swaps. Santos consented to the July order without admitting or denying the findings. The CFTC's three-year restriction applies across all federally regulated prediction markets for a limited period, while Kalshi's ban applies only to Kalshi, but forever. A month ago, Santos agreed to pay $35,000 to settle the federal investigation.
Kalshi operates as a designated contract market under CFTC oversight, making its event contracts subject to federal derivatives rules and exchange-level restrictions. According to Kalshi, the exchange conducted more than 150 investigations during the first quarter of 2026, blocked over 100 suspected insider-trading attempts, and referred 20 cases to law enforcement. The exchange has implemented additional controls including employer-disclosure rules, a whistleblower channel, and risk reviews for proposed markets, following similar cases involving insider trading in prediction markets. The same week as Santos's ban, Kalshi separately banned Laurie Buckhout, a North Carolina Republican congressional candidate, for three years with a $2,589 fine for trading on her own campaign's outcome. The company also issued three-year suspensions to Stephen Cloobeck, a California gubernatorial candidate who bought $10,000 worth of contracts on his candidacy, and Ben Midgley, a Maine gubernatorial candidate who bet less than $1,000 on his campaign. Taken together, these actions signal that Kalshi intends to enforce self-dealing rules against political figures as a category.
